Tuesday, March 8, 2011

Salary Inflation Calculation


March 8, 1930 — Babe Ruth signs a 2-year contract for $160,000 with New York. Yankee’s GM Ed Barrow, wrongly predicts “No one will ever be paid more than Ruth”.


Earlier this year Bartolo Colon, a one time AL CY Young winner, signed a minor league deal with the New York Yankees. The deal could be worth $900,000 plus incentives if he earns a major league roster spot.


These are different time.



Adjusting for inflation (approximately 3.21% annually) that contract for the Babe would be worth $1,632,172.67 or about $100,000 less per year than Colon gets if he makes the 40 man.  


To put it another way, Babe Ruth was paid for a whole year what Alex Rodriguez makes in less than five games (approximately $169,753 per game).


[Chitwood & Hobbs]


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